Are We Seeing the Beginning of the End of the Big Tech Companies?
Facebook faces antitrust lawsuits in the USA, Google gets punished for breaking privacy law in France, and Facebook is accused of tracking citizens’ browsing behaviour at the EU – is this the start of the breakup of the Big Tech companies? Facebook has been served 2 major antitrust suits in the USA. The first is by the Federal Trade Commission (FTC) and the second is a joint case brought by 48 US States Attorney. Both revolve around Facebook’s acquisitions of Instagram (acquired by FB in 2012) and WhatsApp (acquired in 2014). Although at the time FB was given the go-ahead to buy the companies, many competition bodies have questioned the original decision by the US government. The 2 lawsuits allege that Facebook used a strategy of neutralizing competitors before they could threaten the company’s dominance of the social media market, and accuse FB of imposing “anticompetitive conditions” on software developers. Both cases seek a “divestiture of assets” for FB — that is, selling off Instagram and WhatsApp. Additionally, FB is likely to be required to get approval from the FTC before contemplating any mergers or acquisitions in the future. This is important in the light of the recent SA Competition Commission’s paper on “Competition in the Digital Economy”, which this Newsletter reported on in October. Any attempt by FB to hold on to WhatsApp or Instagram outside the USA is likely to be met with similar anti-trust action by the European Union, which has complained about the dominance of some of the “Big Tech” companies for many years, and by South Africa.
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